Toyota Motor Corporation - Losing 'The Toyota Way'?

Case Code: BSTR385
Case Length: 20 Pages
Period: 2005-2010
Pub Date: 2011
Teaching Note: Available

Price: Rs.600
Organization: Toyota Motor Company
Industry: Automotive
Countries: Japan; Global
Themes: Organizational Culture, Globalization

Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

Japan-based Toyota Motor Corporation is one of the leading automobile companies in the world. In addition to adopting various lean manufacturing practices such as Just-in-time, Kaizen, Kanban and Jidoka, which came to be known as the Toyota Production System (TPS), to achieve high efficiency in vehicle production, Toyota cultivated a culture that posed employees with constant challenges enabling them to come out with fresh ideas. The mentorship, social networks, teamwork, training and simple communication ensured that the culture was spread uniformly all across the organization. Toyota had very few suppliers and they played an important part in maintaining high quality of Toyota's products.

Since the 1990s as Toyota's concentration was on growth and spreading its operations globally, TPS started to dilute. In order to reduce costs, Toyota introduced a program called Construction of Cost Competitiveness for the 21^st Century, which intended to reduce the costs across the company's operations by 30% and also expand overseas production. Then a more aggressive version of the program was introduced to reduce production costs and time to market.

Issues

The case is structured to achieve the following teaching objectives

Understand the importance of organizational culture in the success of an organization
Examine how the culture can become inflexible over a period of time and its impact on the organization
Conduct strategic analysis of Toyota's markets and business
Analyze the reasons for quality lapses at Toyota and the impact of such instances on its brand image
Debate whether Toyota emphasized growth at the cost of quality
Examine the way Toyota managed the crisis and debate whether the response by the company was adequate and timely or not
Analyze the measures to be taken by Toyota to rebuild its brand image

Crisis at Toyota

Background Note

Organizational Structure and Culture At Toyota

The Problems

Toyota Loses Its Way

And Quality Deteriorates

Managing Crisis

The Aftermath

Exhibits